Peru has been hard-hit by the COVID-19 pandemic. And while the country tries to recover from an unprecedented public health crisis, elections and global exchange rate fluctuations have added new layers of uncertainty.
In the past year, the country’s poverty level rose from 20% to 30%, while the percentage of people experiencing moderate to severe food insecurity jumped to 55%.
While these increases were largely tied to the COVID-19 pandemic, the country was further destabilized this summer by a protracted presidential election dispute. In addition, Peruvians saw their purchasing power drop sharply due to an unfavorable U.S. dollar exchange rate.
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We checked in with TechnoServe’s Sergio López Zapata, who works with farmers to improve their income through coffee production, to see how these crises were affecting the people we work with in Peru.
In 2019, Peru was the 9th largest producer of coffee in the world, with an industry that now supports 855,000 jobs. The country is also the world’s leading exporter of organic coffee, with 90,000 hectares of land certified as organic.
It’s a critical industry for the country, but often these farmers are hit the hardest.
What are the main food security challenges people are facing? What events are driving these challenges?
The main challenge Peruvian families face is the reduction of purchasing power. There have been price increases for food, transportation, and other goods and services like water and electricity.
In coffee-growing areas, producers saw their access to financing, markets, inputs, and technical assistance limited, causing losses in their farms’ production and income.
“It was a tough situation for us as coffee producers,” says Silvia Isabel Peña Hernández, a coffee producer from Peru’s Sugllaquiro community. “First of all, the lack of food. How do we get food?”
Three events have been driving this challenge:
- COVID-19 contracting the country’s economy
- The U.S. dollar strengthening against the Peruvian sol
- Political uncertainty after the runoff of the June 2021 presidential elections
The increase in the currency exchange rate corresponds to a global phenomenon where the U.S. dollar has been positively positioning itself against most world currencies. In Peru, the rate exchange has also been affected by the delayed proclamation of the new president. Even since this change in administration finally happened, there has been a notable loss of confidence in the new government.
This situation is causing higher inflation than expected, and consequently, there has been an increase in prices – especially for food.
How is COVID-19 impacting the food system in Peru?
In the first half of 2020, the country’s economy was paralyzed due to the COVID-19 pandemic. To prevent the spread of the virus, the Peruvian government established a strict quarantine regime that greatly limited economic activities.
“[We] could only travel in an emergency…we could not leave,” Silvia reflects. “People feared being infected by the virus. That was the fear; that we could not be in touch.”
To help Peruvian families with the most need, the government implemented social programs and distributed food stamps. In mid-2020, the government implemented a reactivation plan and gradually began reestablishing economic activities.
Despite these efforts, Peru still had the world’s highest COVID-induced death rate per capita. Likewise, the government’s efforts to reactivate the economy did not help as expected; instead, the country saw a rise in the informal economy and extreme poverty, which rose from 3% to 5%.
The health crisis increased unemployment and reduced the income of affected families. Resulting food security gaps have caused families to opt for cheap and ultra-processed foods, all of which can have serious health consequences including weight gain and obesity.
What is TechnoServe doing to help?
Through the Alianza CAFE project, TechnoServe has been supporting 8,000 coffee-growing families to sustainably increase and diversify their income by producing other crops and creating small businesses.
To achieve these goals, the program is training smallholder farmers to increase both production and quality. This means:
- Creating and strengthening producer organizations to be more competitive in the coffee market
- Promoting partnerships between producers and exporting companies who recognize the quality of production by paying better prices
- Helping producers get access to financing solutions adapted to their needs
“Although they could not come here due to the pandemic because they were not from the community,” Silvia says. “The CAFE team has always been there.”
As a result of COVID-19, the program couldn’t deliver training or visit farmers for three months. During this period, technology and mobile apps provided essential methods to stay connected. Although trainers couldn’t meet with program participants in person during this time they instead provided updates and training through phone calls, SMS, and WhatsApp.
The TechnoServe team was given permission to pick up the coffee batches from the communities and took farmers to the cities to receive their payment.
Since the start of the program,
- Yields have increased by 50%
- Coffee revenue is up by 80%
- Income from other agricultural activities is 70% higher
Producers and cooperatives have gained access to $15 million in credit. In 2021, producers sold more than 3,500 tons of coffee, generating more than $8 million in sales.
“We are moving forward, trying to overcome the difficulties that arise,” Silvia says with a quiet determination.
While crises and uncertainty may be ongoing, innovative programs like those led by TechnoServe can help farmers take control of their own food security despite challenges.
Are you interested in how you can help make a difference? Learn about how charitable giving can help fight poverty by offering much-needed support and resources to worthy people in low-income countries around the world.